Zerodha Commits Rs 1000 Cr To Rainmatter Initiative

Zerodha Founder and CEO Nithin Kamath on Thursday said the company was increasing commitment to its Rainmatter initiative by allocating an additional Rs 1000 crore.

Rainmatter, established in 2016, was initially launched to provide backing to fintech startups aimed at enhancing individuals' financial well-being. Over the years, Rainmatter has evolved, broadening its focus to encompass various sectors including health, education, climate change and livelihood creation.

Kamath explained that Rainmatter's journey began as an effort to assist tech entrepreneurs who were dedicated to improving financial management. However, its mission soon expanded to encompass a wider array of concerns.

"While we started out by backing tech entrepreneurs who were helping people do better with their money, it has now extended to those helping people make healthier choices, getting educated, and those who are working on the much harder problems of climate change and creating livelihoods," Kamath wrote in a blog post.

The initiative has been successful in fostering partnerships with over 80 startups to date, resulting in investments totaling nearly Rs 400 crore over the past seven years. The success of Zerodha, which has steadily grown profitable, has enabled Rainmatter to increase its allocation, aiding the growth of the Indian startup ecosystem.

The most notable aspect of this expansion is the perpetual structure of the investment. Unlike traditional investment funds that often have exit mandates, Zerodha's Rainmatter is reportedly adopting a patient capital approach. This means that there is no predetermined timeline for divestment, allowing startups to focus on building sustainable and resilient enterprises without the pressure of early exits.

Kamath expressed the significance of this patient capital approach, particularly within the Indian context. "We are now increasing our commitment by increasing the allocation by an additional Rs 1000 crore in a perennial structure or with the ability to stay invested forever. Patient capital with no exit mandates that founders can benefit from when building an enterprise, in India specifically, where unlike in developed countries, it can take much longer to become resilient and sustainable," he emphasised.